Being jobless all too common

Why is rate so high in Illinois?

Published: Thursday, May 16, 2013 10:06 a.m. CDT

(Continued from Page 1)

Illinois has the nation’s second-worst unemployment rate.

At 9.5 percent, it’s two percentage points higher than the national average of 7.5 percent.

Two percentage points might not seem like much on paper, but that equates to 130,000 people.

That’s more than the entire populations of Peor-ia, Springfield or Elgin.

Think about it – that’s how many jobs Illinois would have to create just to be as bad as the rest of the nation.

Only Nevada has a worse unemployment rate than Illinois.

And Nevada’s problems lie almost exclusively with an economy dependent on one industry – gaming.
But Illinois has a much more diverse economy than that.

With our central location, excellent transportation and top-notch workforce, we should be the powerhouse of the nation.

Instead, Illinois is the nation’s biggest laggard.

Why?

Our state has instituted policies that discourage employers from hiring people.

The other day, someone pointed out to me that Texas wasn’t as good a place to live because it had more minimum-wage jobs than Illinois.

Yeah, well, Illinois has more unemployed people.

Which is worse, a minimum-wage job or no job at all?

Illinois has the fourth-highest minimum wage in the nation and legislation is pending to raise it even higher.

The higher you raise the cost of labor, the fewer people get hired.

That is just a basic law of economics. 

And the folks most likely to be hurt by this are the least-skilled workers.

This includes young people. In 2011, only 27 percent of teens in Illinois had jobs, which is the lowest Illinois teen employment rate in the 42 years the U.S. Bureau of Labor Statistics has been tracking this data.

The figures were worst for African-American teens in Chicago, where only 10 percent had jobs.

These numbers are significant because, nationally, 49 percent of all people earning the minimum wage are 24 years old or younger.

Do you remember your first job as a teenager?  I’m willing to bet it didn’t pay much, but it prepared you for the next job down the road.

Aside from the minimum wage, other regulatory costs also contribute to Land of Lincoln’s discouraging unemployment numbers.

For example, the high cost of workers’ compensation deters companies from locating in Illinois, and serves as an added impediment for existing employers to expand their workforce.

Just consider, for every hundred dollars in payroll, Texas employers pay 39 cents for workers’ compensation insurance; their Illinois counterparts pay $1.10.

And like it or not, taxes also play a role in the state’s unemployment rate.

Illinois has the fourth-highest corporate income tax in the industrialized world.

This deters companies from locating here, taking away money from business and making it more difficult for them to expand.

If we want the Prairie State’s employment numbers to re- bound, we need less from government – not more.

Illinois needs to tax less, regulate less and get out of the way.

This will give industry greater opportunity to employ Illinoisans. 

———

Scott Reeder is a veteran statehouse reporter and the journalist in residence at the Illinois Policy Institute. He can be reached at sreeder@illinoispolicy.org. Readers can subscribe to his free political newsletter by going to ILNEWS.ORG or follow his work on Twitter @scottreeder

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